The start of the Obama administration was stunning and very different from Trump’s early days. Even before Obama had had time to choose a cabinet, much less form a complete government, his White House managed to push through Congress the massive and complex stimulus program called the American Recovery and Reinvestment Act, appropriating almost $800 billion — more than 5 percent of the nation’s GDP — to fund more than 200 grant programs and 50 tax expenditure subsidies. Almost overnight, the federal government had mobilized an unprecedented combination of resources and enhanced authority to confront the economic crisis [Peter Harkness “Let’s Give the Stimulus Its Due,” Governing, 2017.07.12].
Folks who claim tax cuts for the rich trickled down to broad benefit under Reagan forget another confounding factor that may have had much more to do with economic growth in the 1980s: Reagan’s massive deficit spending on the military… also known as economic stimulus:
…Jared Bernstein, former chief economist for Vice President Biden and a senior fellow at the Center on Budget and Policy Priorities… says, it’s not clear that tax cuts are what juiced the economy in the 1980s, noting Reagan spearheaded massive increases in defense spending — from $325 billion in 1980 to as much $456 billion in 1987 — that rippled across the economy [Paul Davidson, “Can Trump Make ‘Trickle-Down’ Economics Work?” USA Today, 2016.11.13].
Novstrup said there are three factors that will affect South Dakota’s decision about Medicaid — the presidential election, the outcome of the federal decision to fully cover Indian Health Services and the facts presented to the Legislature.
He did not say whether he’s in favor or opposed to expansion, but said each decision the Legislature makes to spend money ultimately takes money away from another part of state government [Elisa Sand, “Heidelberger, Novstrup Face off in District 3 Senate Battle,” Aberdeen American News, 2016.11.02].
Heidelberger’s perspective on Medicaid expansion is clearer.
“We need legislators to take the lead and pass it,” he said.
Heidelberger said South Dakota has had the option for three years to expand Medicaid services. This expansion would cover low-income adults who don’t meet the income qualifications for private insurance on the open market.
“The governor’s plan is really, really good,” Heidelberger said. “It’s the best a fiscal conservative could ask for” [Sand, 2016.11.02].
The Rounds-Daugaard regime botched its administration of the EB-5 visa investment program. The state hilariously asserts that it should not be punished for our past failure, which sounds a lot like a drunk driver saying he shouldn’t lose his license for crashing into that bus last night.
My local newspaper doesn’t call Rounds and Daugaard drunk drivers, but it does recommend the state give up its EB-5 license:
Control of the EB-5 program pretty well switched hands in 2009, when the state allowed the newly formed private company SDRC Inc. to run it with little to no oversight.
That led to several investigations, lawsuits, at least one failed project, a death and a mess of money that wasn’t necessarily used for its intended purpose.
…EB-5, under South Dakota or the company the state privately contracted with, has run its course. Trying to keep the state’s hand in the program continues to waste the time of officials who likely have other things to focus on.
Not only is the continued pursuit of ability to administer EB-5 a waste of time and energy, and could continue to come at a cost. Pursuing the program is a disservice to those who are already investing and living in our state [editorial board, “SD Must Walk Away from EB-5,” Aberdeen American News, 2016.08.14].
The Rounds-Daugaard regime also mismanaged the stimulus dollars it gladly took to balance our state budget in 2009. We took $23.7 million in Department of Energy stimulus dollars conditioned on improving energy efficiency, promised to fulfill those conditions, and then didn’t:
The state failed to make good on the assurances required by the federal government to enact statewide building code requirements making new homes and commercial buildings more energy efficient, an Argus Leader Media investigation found. Now, a 2017 deadline is looming: In return for taking the energy efficiency money, states have until 2017 to adopt more efficient energy codes and to create a plan to ensure that at least 90 percent of new buildings are compliant.
Ellis reports that a state task force looked closely at the stimulus conditions and decided to gamble that there would be no enforcement. But just like with EB-5, we may lose out on future opportunities:
Realistically, said Maureen Guttman, the president of the Building Codes Assistance Project, which advocates for stronger building codes, the Department of Energy can’t “claw back” the money it gave South Dakota. But if the state expects future funding, that could be put at risk
“I do think they could use it as criteria for future eligibility. Absolutely I do,” Guttman said [Ellis, 2016.08.13].
South Dakota Republicans preach personal responsibility, but they don’t seem to apply that concept to their own administration of federal funds. On EB-5 and now stimulus dollars, the feds are getting wise to South Dakota’s game, and they’re going to hold us responsible for our errors.
Dentist and District 8 Republican Rep. Leslie Heinemann thinks expanding Medicaid is too risky. Dentist Leslie Heinemann has apparently never experienced the risk of living without affordable health insurance, a problem that expanding Medicaid would solve for 50,000 South Dakotans.
Proponents of Medicaid expansion say the federal government will pay for this new program, but can we trust the federal government to follow through? The federal government has broken promises before — Indian Health Services, the Veterans Choice and Accountability Act, and the Lewis and Clark Water Project are just three examples. And those broken promises were backed by treaties and legislation [Rep. Leslie Heinemann, “Medicaid Expansion Too Risky for S.D.,” that Sioux Falls paper, 2016.07.01].
Rep. Heinemann here repeats the lie peddled by the Koch Brothers that we need to reject any program funded by the federal government. I await Rep. Heinemann’s vote to reject federal highway dollars and to dissolve the Ellsworth Development Authority, because the federal government could default on its transportation and military budget at any moment.
Rep. Heinemann tries to be a little more logical by citing examples of Medicaid expansion enrolling more people than expected in other states:
Medicaid expansion is a fiscal disaster waiting to happen that endangers our state’s strong fiscal condition. In other states that have expanded Medicaid, enrollment has surpassed estimates, creating access issues as well as skyrocketing costs. In Washington state enrollment ballooned 104 percent over projections, in Nevada enrollment exceeded projections by 113 percent, and in Montana 20,000 enrollees signed up the first day although only 18,600 were projected to sign up during the first fiscal year. These numbers show that no projection, however well-intentioned or conservative, can accurately predict Obamacare Medicaid expansion enrollment [Heinemann, 2016.07.01].
The state paid about $522 million in general funds for newly enrolled and existing Medicaid recipients in fiscal year 2014, while it received a match of about $1.4 billion in federal funds that year. With more than 180,000 newly eligible recipients recently signed up, the state expects to pay $531 million in general funds for Medicaid this fiscal year, while receiving a federal match of $2.4 billion [Michelle Rindels, “Nevada Expects to Spend More on Medicaid Than Planned,” Reno Gazette-Journal, 2015.07.20].
Hmmm… spend $9 million more (1.7%) in state funds, get $1.0 billion (71%) more in federal health care dollars. That’s like the boss saying that if I deposit an extra $690 in my retirement account, they’ll match it with $36,000. I’m of the impression dentists take some math in college, but in case Les is still scratching his head, the answer to this story problem is yes!!!
And what about Rep. Heinemann’s third example, Montana? Oh, my goodness—it turns out that by March, their enrollment was up to 38,000, almost double that first-year projection. Everything’s going to heck, right?
The Department of Public Health and Human Services also announced this week that the State of Montana has already experienced $3 million in savings to the state general fund, and over $37 million in NEW federal dollars invested in communities across the state [Julia Cramer, “Montana Can Expect Continued Economic Benefits from Medicaid Expansion,” Montana Budget and Policy Center: Charted Territory, 2016.03.25].
Um, well, everything’s going to go to heck, right?